By Cathy Maulidi:
The country has about 14,500 metric tonnes (mt) of fertiliser that are available for distribution, but Affordable Inputs Programme (AIP) beneficiaries cannot access the same because the soil-enriching substance is under collateral.
Under the collateral agreement, the government is keeping the fertiliser in its warehouses but cannot access it unless it pays the suppliers, who are keeping keys for the warehouses and are demanding that they be paid in United States dollars.
This came to the fore during a meeting that the Agriculture Committee of Parliament had with officials from the Ministry of Agriculture on progress of this year’s AIP.
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They should work
quickly with the banks
Smallholder Farmers Fertiliser Revolving Fund of Malawi Chief Executive Officer Richard Chikunkhuzeni told committee members that there is fertiliser being held in government warehouses but was quick to say the storage facilities cannot be unlocked unless the fertiliser is paid for.
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“This is fertiliser that contracted suppliers, on our encouragement, placed in our warehouses in Blantyre, Lilongwe and Mzuzu. To us, this was like security. Whenever we saw the fertiliser, we knew we could access it the moment we paid for it.
“We had over 31,000 metric tonnes placed in our warehouses and, last week with support of $15 million from the Reserve Bank of Malawi (RBM), we managed to unlock 16,500 metric tonnes of the collateral fertiliser, which is under distribution,” Chikunkhuzeni said.
He added that the other fertiliser is being held in suppliers’ warehouses.
Chikunkhuzeni added that the government is banking on $33 million that would come from Ecobank if the Letter of Credit (LCs) is confirmed.
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“This is what is giving us the [sense of] relief that we will be able to unlock close to 36,000 metric tonnes for distribution immediately the LCs are confirmed,” he said.
During the meeting, committee members learned that forex shortage is one of the issues facing AIP.
Chikunkhuzeni said RBM has supported them with $20 million, out of which $15 million has been received, and that they are also banking on a facility, worth $100 million, with Ecobank, out of which $33 million is being processed.
Chikunkhuzeni could, however, not disclose whether the whole $100 million is for AIP fertiliser.
Principal Secretary for Agriculture Dickxie Kampani said the ministry is working with RBM and the Treasury to sort out the problem of forex.
“The problem of forex [shortage] is being dealt with by the Ministry of Agriculture, Finance and the Treasury,” Kampani said.
According to Kampani, at the moment there is about 36,000mt that are readily available for distribution.
Meanwhile, Vice Chairperson for the Agriculture Committee of Parliament Ulemu Chilapondwa has said they are hopeful that the ministry will be helped with forex to have the fertiliser unlocked.
“Our wish is that they should work quickly with the banks to get the forex so that the fertiliser that is under collateral can be released in good time so that they should meet the deadline as ordered by the President [Lazarus Chakwera],” Chilapondwa said.
